What Is BITCOIN? Everything You Wanted To Know And Never Dared To Ask.

One important word in the world of Technology is BITCOIN. Every media is talking about it and not so many people really know what is it. Why people do not dare to ask? Because you have the feeling that if you ask what is BITCOIN in 2017, you will be seen as an old grandpa. So let’s avoid some embarrassing moments. Read carefully what follows and you will be the expert on BITCOINS.

BITCOIN, main definition.

First things first. Let’s start by defining what is a Bitcoin. This is know as a new currency that was created in 2009 by an unknown person named Satoshi Nakamoto. The main initial idea is to generate transactions without any intermediaries, meaning no banks or any financial institutions. This also means no transaction fees and even, no need to be identified with your real name and address. You can buy anonymously products and services around the world and there are no extra costs as Bitcoins are not tight to any currency or any international regulation. It sounds like a geeky thing but more and more merchants are joining the bitcoin evolution and accept it as payment. You can buy for example anything related to your website (hosting, URLs…) as well as Pizza or even manicures. In Switzerland, a very famous “brothel” accepts Bitcoins now (apparently). this new currency might be very interesting for small businesses because there are no credit card fees with it. Obviously there are a lot of people who is buying a lot of Bitcoins, hoping the value will go up and up.

Bitcoins are not like any currency. It is digital, created electronically and above all: no one controls it. You cannot print Bitcoins and one of the interesting aspect of it: They are produced by normal people, running computers all around the world, using software that solves mathematical problems. It is also called a cryptocurrency, meaning a digital currency that manages transaction between people.

How BITCOINS are made and who makes it?

Like gold, we need good miners to create Bitcoins. When the system was created back in 2009, the idea was to built a decentralized system that would allow almost anyone around the world to create Bitcoins. The idea is to use a software that allows to solve mathematical challenges. By solving these problems, each Miner gets 25 Bitcoins. So this cryptocurrency is not ruled by the same kind of rules as other standard currencies. Obviously the system is quite complex and generates a certain limit. Some people say that we cannot produce more than 21 million Bitcoins, others say there is no limit if the protocols change. Currently in the world there are 16’366’275 Bitcoins in circulation. Which means that we might reach the limit quite soon. This speculation creates a pressure in the market and the Bitcoin price has been sky-rocketing in the past 2 years.

As we can see, one Bitcoin worth more than a USD 1`000$. By the end of this year will reach the highest value in history as more and more people are interested in Bitcoins. Probably the fact that Bitcoins might be reaching the limit, creates an extra pressure in the market. This is crazy and makes Bitcoins as the most valuable cryptocurrency in the world (by far).

Where can we buy BITCOINS?

As there are no banks or cash machines to get some Bitcoins, you might wonder how could you get some? As any Cryptocurrency, Bitcoins are sold by online websites who has relationships with Miners, who will generate the transactions. Here are five interesting websites where you can buy Bitcoins. If you dare to move ahead with this, please read more about Bitcoins and also about terms and conditions. It is not a game and some people think they can win big with this.

1- BITSTAMP This is the first licensed operator of Bitcoin. It has been selling Bitcoins for the past 5 years. You can use your credit card to purchase Bitcoins from the website and you can even exchange your Bitcoins against Gold, like (theoretically any standard currency). Website :http://bitstamp.net

2- OKCOIN This company is based in Hong Kong. You can buy as well as sell Bitcoins in this website. The website is pretty much minimalistic and one good advice: Only use it if you are used with the rules of online trading. Otherwise it might get a bit complex. Website: http://okcoin.com

3- KRAKEN This platform is also part of the firsts platforms to start trading Bitcoins, so they have been around for a while. You will be able to leverage and short on the platform which makes it a perfect place for Bitcoin traders. The only specificity in this website is that you need to set up a two-factor authentification for your account. It is mandatory and if you do not do it your account will be simply deleted and you loose your Bitcoins. Website: https://www.kraken.com

4- LOCALBITCOINS This website looks more about a social network for people dealing with Bitcoins. If you are the kind of one-to-one relationship, you can here connect to people and have private discussions and share information. It is an interesting addition to other websites. Website: https://localbitcoins.com

5- COINBASE Let’s finish our top 5 with this website. Coinbase is the perfect website for beginners or for advanced Bitcoins buyers. You can well manage your purchases, and follow your transactions day after day, week after week. They are also very strict with the kind of business will be running through them, so no room for gray areas. Website: https://www.coinbase.com

In conclusion, do not expect to find metal coins with a Bitcoin symbol on it or even paper money. Bitcoin is a digital currency that only exists online. With the information above you should be able to navigate across everything that is said about Bitcoins. Please be aware that this is real business and not just another game. So if you purchase Bitcoins you are really acquiring currency and paying for it. Make sure you think twice before getting to Bitcoin paradise.

José Amorim has been working in the luxury industry for more than 15 years. In the past 8 years, he joined his personal passion for digital culture and his luxury background to develop digital strategies for premium brands. He is the founder of LuxuryActivist.com and is happy to share his passion here.